Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)

Renewable Energy Description:

On 1 January 2012 the amendment of the Renewable Energy Sources Act (EEG) will come into force (EEG 2012). In agreement with the Energy Concept of the government dating from September 2010, it aims at reaching the following minimum shares of renewable energy in electricity supply:

35% by 2020

50% by 2030

65% by 2040

80% by 2050

The basic principles of the EEG, in particular priority purchase, transport and distribution of electricity generated from renewable energy sources as well as statutory feed-in compensation, remain unchanged.

According to the growing share of renewables in the total electricity production, market integration, system integration and grid integration gain considerably in importance. Main mechanisms to improve integration are:

- A market premium (optional for all renewables, from 2014 compulsory for new biogas facilities).

- A flexibility premium (for new and existing biogas facilities).

- A rebate in compensation payments for utility companies selling electricity generated at least 50 % from fluctuating renewable energy sources, inclusion of photovoltaic plants in the feed-in management, as well as supporting instruments outside the EEG.

With respect to the latter a number of measures were adopted as part of the energy package of the Federal cabinet, among which an act amending provisions of energy business legislation ("Gesetz zur Neuregelung energiewirtschaftsrechtlicher Vorschriften"), an act on measures to accelerate the expansion of the electricity grid ("Gesetz über Maßnahmen zur Beschleunigung des Ausbaus der Elektrizitätsnetze") and others.

The feed-in tariff structure for onshore wind remains mainly unchanged. The initial tariff of EUR Cent 8.93/kilowatt-hour (kWh) will be decreased every year for new installations by 1.5 percent, as opposed to one percent in the EEG 2009. Instead of limiting the payment of the system service bonus, fixed at EUR cent 0.48/kWh for the year 2012, to the end of 2013, it will be paid until end of 2014 for new and until end of 2015 for existing facilities. The repowering bonus of EUR Cent 0.5/kWh (to support the replacement of old turbines by new ones) is restricted to wind turbines that were put into operation before the year 2002.

For offshore wind, the initial tariff remains at EUR Cent 15/kWh. The tariff for new turbines will not be decreased before the year 2018 (instead of 2015 initially), with a then 7% annual rate of degression ( 5% intially). To accelerate repayment of investment in offshore wind farms an optional feed-in tariff model was introduced, which offers an initial tariff of EUR Cent 19 /kWh paid for 8 years (standard model: EUR cent 15/kWh for 12 years).

A number of further supporting measures outside the EEG are taken to stimulate offshore wind energy, among others a dedicated loan programme of the KfW bank.

For hydropower the tariff structure is simplified and harmonised: the differentiation between new and modernised facilities is abandoned, the feed-in tariff will be paid for 20 years and the initial remuneration will decrease by one percent per year. Initial tariffs are: - up to 500 kilowat: EUR Cent 12.7/kWhEUR - up to 2 megawatt (MW): EUR Cent 8.3/kWh - up to 5 MW: EUR Cent 6.3 ct/kWh - up to 10 MW:EUR Cent 5.5 ct/kWh - up to 20 MW: EUR Cent 5.3 ct/kWh - up to 50 MW: EUR Cent 4.2 ct/kWh - over 50 MW: EUR Cent 3.4 ct/kWh .

For biomass facilities tariffs decrease by 10 to 15 per cent on average, compared to the EEG 2009. Biogas plants only qualify for remuneration if they comply with basic requirements: at least 60 per cent of the heat produced is used, or the facility is operated using 60 per cent or more of slurry, or the electricity is sold directly.

Furthermore electricity from biogas may not be based on more than 60 per cent of maize and grain. The tariff structure is simplified and harmonised, having 4 capacity-oriented categories (basic tariff from EUR Cent 6 to 14.3/kWh).

Additional remuneration is paid depending on the type of biomass used as fuel (from EUR Cent 2.5 to 8/kWh). Small facilities on farms that deploy at least 80 per cent slurry receive a remuneration of 25 ct/kWh. Furthermore there is a special tariff for waste biomass fermentation plants. A bonus of EUR Cent 1 to 3/kWh is paid for processing and feed-in of bio-methane. The initial basic tariff decreases by two percent per year, whereas the fuel-related tariff does not change.

The bonus for use of petrothermal technology increases from EUR Cent 4 to 5/kWh.

The tariff structure of the EEG 2009 for photovoltaic plants is continued. The tariff may be decreased twice a year depending on the capacity newly built in the previous period: on 1 January tariffs decrease between 1.5 per cent and 24 per cent (basic degression rate of 9 per cent for an additional capacity installed between 2,500 and 3,500 MW). A part of the decrease (0 to 15 per cent) can be antedated on 1 July, if capacity expansion exceeds defined threshold values. The special tariff for electricity consumed within the building or site of production remains in force until end of the year 2013. New free-standing facilities on conversion areas in natural reserves and national parks are not eligible for remuneration.

To improve grid integration of PV facilities over 100 kW underlie feed-in management, for facilities over 30 kW a simplified feed-in management will apply. Smaller facilities may also participate in the latter, or alternatively may feed in a maximum of 70 per cent of their installed power.

To limit the increase of total feed-in-payments an amendment referring to PV facilites ('PV-Novelle') was agreed on end of June 2012, but effective 1 April 2012. Main components of this amendment are an overall target of 52 Gigawatt of PV power reimbursed according to the feed-in tariff (FIT), an extra decrease of tariffs, a modification of the degression scheme reducing tariffs by 1% monthly (corresponding to a basic degression rate of ca. 11.4% p.a.), the introduction of a new category for roof-top facilities and the limitation of the total power of a facility to 10 Megawatt.

With effect from 1 January 2013 the management premium (which is part of the market premium) for wind and PV facilities is reduced.

Climate Change Description:

On 1 January 2012 the amendment of the Renewable Energy Sources Act (EEG) will come into force (EEG 2012). In agreement with the Energy Concept of the government dating from September 2010, it aims at reaching the following minimum shares of renewable energy in electricity supply:

35% by 2020

50% by 2030

65% by 2040

80% by 2050

The basic principles of the EEG, in particular priority purchase, transport and distribution of electricity generated from renewable energy sources as well as statutory feed-in compensation, remain unchanged.

According to the growing share of renewables in the total electricity production, market integration, system integration and grid integration gain considerably in importance. Main mechanisms to improve integration are:

- A market premium (optional for all renewables, from 2014 compulsory for new biogas facilities).

- A flexibility premium (for new and existing biogas facilities).

- A rebate in compensation payments for utility companies selling electricity generated at least 50 % from fluctuating renewable energy sources, inclusion of photovoltaic plants in the feed-in management, as well as supporting instruments outside the EEG.

With respect to the latter a number of measures were adopted as part of the energy package of the Federal cabinet, among which an act amending provisions of energy business legislation ("Gesetz zur Neuregelung energiewirtschaftsrechtlicher Vorschriften"), an act on measures to accelerate the expansion of the electricity grid ("Gesetz über Maßnahmen zur Beschleunigung des Ausbaus der Elektrizitätsnetze") and others.

The feed-in tariff structure for onshore wind remains mainly unchanged. The initial tariff of EUR Cent 8.93/kilowatt-hour (kWh) will be decreased every year for new installations by 1.5 percent, as opposed to one percent in the EEG 2009. Instead of limiting the payment of the system service bonus, fixed at EUR cent 0.48/kWh for the year 2012, to the end of 2013, it will be paid until end of 2014 for new and until end of 2015 for existing facilities. The repowering bonus of EUR Cent 0.5/kWh (to support the replacement of old turbines by new ones) is restricted to wind turbines that were put into operation before the year 2002.

For offshore wind, the initial tariff remains at EUR Cent 15/kWh. The tariff for new turbines will not be decreased before the year 2018 (instead of 2015 initially), with a then 7% annual rate of degression ( 5% intially). To accelerate repayment of investment in offshore wind farms an optional feed-in tariff model was introduced, which offers an initial tariff of EUR Cent 19 /kWh paid for 8 years (standard model: EUR cent 15/kWh for 12 years).

A number of further supporting measures outside the EEG are taken to stimulate offshore wind energy, among others a dedicated loan programme of the KfW bank.

For hydropower the tariff structure is simplified and harmonised: the differentiation between new and modernised facilities is abandoned, the feed-in tariff will be paid for 20 years and the initial remuneration will decrease by one percent per year. Initial tariffs are: - up to 500 kilowat: EUR Cent 12.7/kWhEUR - up to 2 megawatt (MW): EUR Cent 8.3/kWh - up to 5 MW: EUR Cent 6.3 ct/kWh - up to 10 MW:EUR Cent 5.5 ct/kWh - up to 20 MW: EUR Cent 5.3 ct/kWh - up to 50 MW: EUR Cent 4.2 ct/kWh - over 50 MW: EUR Cent 3.4 ct/kWh .

For biomass facilities tariffs decrease by 10 to 15 per cent on average, compared to the EEG 2009. Biogas plants only qualify for remuneration if they comply with basic requirements: at least 60 per cent of the heat produced is used, or the facility is operated using 60 per cent or more of slurry, or the electricity is sold directly.

Furthermore electricity from biogas may not be based on more than 60 per cent of maize and grain. The tariff structure is simplified and harmonised, having 4 capacity-oriented categories (basic tariff from EUR Cent 6 to 14.3/kWh).

Additional remuneration is paid depending on the type of biomass used as fuel (from EUR Cent 2.5 to 8/kWh). Small facilities on farms that deploy at least 80 per cent slurry receive a remuneration of 25 ct/kWh. Furthermore there is a special tariff for waste biomass fermentation plants. A bonus of EUR Cent 1 to 3/kWh is paid for processing and feed-in of bio-methane. The initial basic tariff decreases by two percent per year, whereas the fuel-related tariff does not change.

The bonus for use of petrothermal technology increases from EUR Cent 4 to 5/kWh.

The tariff structure of the EEG 2009 for photovoltaic plants is continued. The tariff may be decreased twice a year depending on the capacity newly built in the previous period: on 1 January tariffs decrease between 1.5 per cent and 24 per cent (basic degression rate of 9 per cent for an additional capacity installed between 2,500 and 3,500 MW). A part of the decrease (0 to 15 per cent) can be antedated on 1 July, if capacity expansion exceeds defined threshold values. The special tariff for electricity consumed within the building or site of production remains in force until end of the year 2013. New free-standing facilities on conversion areas in natural reserves and national parks are not eligible for remuneration.

To improve grid integration of PV facilities over 100 kW underlie feed-in management, for facilities over 30 kW a simplified feed-in management will apply. Smaller facilities may also participate in the latter, or alternatively may feed in a maximum of 70 per cent of their installed power.

To limit the increase of total feed-in-payments an amendment referring to PV facilites ('PV-Novelle') was agreed on end of June 2012, but effective 1 April 2012. Main components of this amendment are an overall target of 52 Gigawatt of PV power reimbursed according to the feed-in tariff (FIT), an extra decrease of tariffs, a modification of the degression scheme reducing tariffs by 1% monthly (corresponding to a basic degression rate of ca. 11.4% p.a.), the introduction of a new category for roof-top facilities and the limitation of the total power of a facility to 10 Megawatt.

With effect from 1 January 2013 the management premium (which is part of the market premium) for wind and PV facilities is reduced.